Camelot Global Services PA LLC agreed to extend its bid’s expiration date, which was yesterday, to Jan. 10. That delay will give the Corbett administration time to weigh it against a counter-proposal that the American Federation of State, County and Municipal Employees Council 13 is putting together that is due by Jan. 8.

AFSCME 13 represents some of the 160 to 170 lottery employees who stand to lose their state jobs if the privatization contract is executed.

The administration said the extension also will give more time for its consultant Kroll Advisory Solutions to complete its report on the integrity and suitability of Camelot to serve as the lottery’s private manager.

In its bid, Camelot, a British-based company owned by the Ontario Teacher’s Pension Fund, is committing to producing at least $34 billion in lottery profits over the next 20 years. It is counting on Keno and online games to help it achieve those profit goals.

It proposes to back up those profit commitments with $150 million in cash collateral and a $50 million letter of credit.

The Corbett administration is attracted to the privatization initiative as a way to ensure funding increases to keep up with the demand from a growing population of older Pennsylvanians for lottery-funded programs and services geared to them.

When reached shortly after the extension was announced, David Fillman, executive director of AFSCME 13, said on Monday he was bewildered by the administration’s agreeing to an extension that would expire before a Jan. 14 Senate Finance Committee hearing on the privatization.

But Sen. Mike Brubaker, R-Lancaster, who chairs the finance committee, said in a subsequent interview on Monday he has been told by the governor’s office that a second extension is anticipated.

“It would be my hope and desire that the second extension will go beyond the hearing date,” he said.

Moreover, he added, “It’s my desire that the administration and Camelot not finalize an agreement before the conclusion of my hearing.”

Brubaker said too many questions remain unanswered in the public arena about this privatization move and he hopes his hearing will remedy that.

Among them, he wants to know why Camelot was the only company to submit a bid, whether the lottery profits will continue to go exclusively to senior programs and how Camelot’s track record of running the National Lottery in England compares to the Pennsylvania Lottery.

“With a potential $34 billion commitment to a lottery expansion, we – as elected officials – have a duty to all Pennsylvanians to ensure such discussions and questions surrounding this issue are open, transparent and above reproach,” he said in a news release from his office issued on Monday.

Brubaker intends to seek testimony from all sides of this controversial move that would be a first test of Corbett’s philosophy that the private sector is better suited to running some programs that are outside government’s core mission.

The senator said he will enter the hearing from a neutral position although he supports privatization of governmental services when feasible but only “after an open and thoughtful process which is completely aired in the public.”

In announcing the extension, Camelot officials stated in a news release that they remain confident in their projections of growing the lottery over the next 20 years and “standby our commitment to make major investments in the lottery – in its brand, in its operations and in its people.”

The statement went on to reiterate their intention of retaining as many of the current lottery employees as possible, although those employees will no longer be on the state payroll. Camelot also plans to incorporate in Pennsylvania and locate its Pennsylvania Lottery operations here.

“With our offices here, we will pay all relevant taxes, making our investment in Pennsylvania total and complete,” the firm's statement says.

“We look forward to working with the commonwealth as it continues to conduct the next phase of the process."

Fillman said the union stands firm in its position that if the administration looks at the overall picture especially considering the lottery’s record-setting $1 billion-plus in profits last year, it will see it makes sense to keep it in house.

“We came out of a banner year,” he said. “It makes sense to keep it in-house and we’ll continue to make that pitch including if they want to do Keno and online (games). Our guys and gals are ready to go ahead and do it.”

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